Trump, allies doing all they can to create a full-scale depression

Last week, the Bureau of Labor Statistics officially validated what we already knew: Just a few months into the COVID-19 crisis, America already has a Great Depression level of unemployment. But that’s not the same as saying we’re in a depression. We need to wait to see whether extremely high unemployment lasts for a long time, say a year or more.

Unfortunately, the Trump administration and its allies are doing all they can to make a full-scale depression more likely.

But first, regarding that unemployment report, notice I didn’t say “the worst unemployment since the Great Depression”; I said “a Great Depression level,” a much stronger statement.

To understand why I said that, you need to read the report, not just the headlines. An unemployment rate of 14.7% is horrific, but the bureau included a note indicating that this number may understate true unemployment by almost five percentage points.

If that’s true, our current unemployment rate is around 20% — worse than all but the worst two years of the Great Depression. But how quickly can we recover?

If we could get COVID-19 under control, recovery could be rapid. Recovery from the 2008 financial crisis took a long time due to problems that had accumulated during the housing bubble. There don’t seem to be comparable problems now.

But getting the virus under control doesn’t mean “flattening the curve,” which, by the way, we did — we managed to slow the spread of COVID-19 enough that our hospitals weren’t overwhelmed. It means crushing the curve: getting the number of infected Americans way down, then maintaining a high level of testing to quickly spot new cases, combined with contact tracing so we can quarantine those who may have been exposed.

To do so, we must first maintain a rigorous regime of social distancing for however long it takes to reduce new infections to a low level. And then we’d have to protect all Americans with the testing and tracing already available to people who work for Donald Trump but almost nobody else.

Crushing the curve isn’t easy, but many other countries, including South Korea, New Zealand and Greece, have already done it.

Bringing the infection rate way down was much easier for countries that acted quickly to contain the coronavirus, while the rate was still low, rather than spending many weeks in denial. But even places with severe outbreaks can bring their numbers down if they stay the course. In New York City, for example, new daily cases and deaths are a fraction of what they were a few weeks ago.

But you have to stay the course. And that’s what Trump and company don’t want to do.

It seemed the Trump administration was finally taking COVID-19 seriously when, in mid-March, it introduced social distancing guidelines.

But lately, the White House just says we need to reopen the economy, though we’re nowhere close to the point we can do so without risking a second wave of infections.

Meanwhile, the administration and its allies seem dead set against providing the financial aid that would let us sustain social distancing without extreme financial hardship. Extend enhanced unemployment benefits, which will expire July 31? “Over our dead bodies,” says Sen. Lindsey Graham. Aid to state and local governments, which have already laid off 1 million workers? That, says, Mitch McConnell, would be a “blue-state bailout.”

As Andy Slavitt, who ran Medicare under Barack Obama, puts it, Trump is a quitter. Faced with the need to actually do his job and do what’s necessary to crush the pandemic, he just quit.

And this retreat from responsibility won’t just kill thousands. It might also turn the COVID slump into a depression.

Here’s how: In coming weeks, many red states abandon social distancing policies and many individuals take their cues from Trump and Fox News and behave irresponsibly. Briefly there’s a rise in employment.

But soon COVID-19 spirals out of control. People return to their homes, whatever Trump and Republican governors say.

Then we’re back where we started economically, and worse off epidemiologically. Double-digit unemployment of only a few months instead goes on and on.

So Trump’s search for an easy way out, his impatience with the hard work of containing a pandemic, may be precisely what turns a severe but temporary slump into a full-blown depression.